Electricity Regulation (Amendment) (EirGrid) Bill 2008: Second Stage.

Minister for Communications, Energy and Natural Resources (Deputy Eamon Ryan)

I move: "That the Bill be now read a Second Time."

I am pleased to introduce the Electricity Regulation (Amendment) (EirGrid) Bill for the consideration of this House. Although it is a relatively short Bill, its provisions underpin several crucial elements of the Government's energy policy and it is a key constituent of the Government's priority legislative programme.

This Bill provides for an enhanced role for EirGrid, as a strong independent State company, and underpins the development of electricity interconnection generally. The early enactment of this Bill will also facilitate the delivery to schedule of the east-west electricity interconnector.

I would like to speak first about the expanded role for EirGrid in relation to interconnectors. EirGrid plc is the fully independent transmission system operator licensed by the Commission for Energy Regulation, CER. Since it took over as the licensed operator of the electricity transmission system in 2006, EirGrid has rapidly developed into a dynamic new player in the Irish electricity market. This Bill is the first step in expanding the functions of EirGrid, in line with the Government's energy policy framework and An Agreed Programme for Government.

EirGrid's current statutory functions as transmission system operator include the operation, planning and development of the Irish electricity transmission system; the independent operation of the single electricity market in co-operation with EirGrid's Northern Ireland equivalent, SONI; and the critical task of monitoring and reporting on security of electricity supply and generation adequacy.

EirGrid's statutory remit also provides for it to develop opportunities for interconnection of the Irish transmission system with other systems, in all cases with a view to ensuring that all reasonable demands for electricity are met and having due regard for the environment.

This Bill expands the statutory functions of EirGrid in relation to interconnection. It provides that EirGrid may construct, own and operate an interconnector subject to the grant of the appropriate licence and authorisation by the regulator. EirGrid plc was established by the European Communities (Internal Market in Electricity) Regulations 2000, or SI 445 of 2000. On the advice of the Office of the Parliamentary Counsel to the Government, this Bill restates certain provisions of these regulations in primary legislation in order to provide the strongest possible underpinning for EirGrid's new role. The corresponding provisions in SI 445 will be revoked to avoid duplication. The provisions which are being restated in primary legislation relate to subsidiaries of EirGrid and borrowings and capital expenditure by EirGrid. These provisions are restated in slightly amended form and include an increase in EirGrid's borrowing limit to a total of €750 million.

The increased borrowing limit provides EirGrid with the financial leverage and scope to develop its expanded role and advance a challenging agenda. The issues of climate change and energy security are urgent and imperative priorities for Ireland, the EU and all governments worldwide. The achievement of the ambitious targets we have set for emissions reduction, renewables and energy efficiency improvement present key challenges for the electricity sector. At the same time, this sector has recently entered a new era with the establishment of the all-island single electricity market. At this time of unprecedented change, EirGrid has an increasingly important strategic role to play.

I look forward to the publication shortly of EirGrid's transmission development strategy 2025, which will be crucial in identifying how we can support the increasing penetration of renewable energy generation and address the technical challenges in terms of the development and operation of the electricity transmission system. It will underpin our continued economic, social and regional development.

I have recently announced an independent study on the transfer of the electricity transmission assets. I expect that EirGrid, as a key State stakeholder, will provide an important input into this analysis. As regards interconnection, EirGrid is currently progressing the development of the second North-South interconnector in co-operation with the Northern Ireland authorities. The publicly expressed concerns in regards to this and other essential transmission system developments, serve to underline the complexity of the task facing EirGrid in the coming years.

In this context, my Department has commissioned a study to provide the best available independent professional advice on the relative merits of constructing and operating overhead transmission lines as compared with underground cables. The study will focus on technical characteristics, reliability, operation and maintenance factors, environmental impact, possible health issues and cost of both types of electricity infrastructure. In anticipation of the enactment of this Bill, EirGrid is also currently advancing the development of the east-west electricity interconnector.

The Government attaches the highest priority to this project, which will contribute to security of supply and competitiveness as well as providing increased potential for the export of wind-generated electricity. I will expand on a few of the potential benefits to Ireland from interconnection with the UK market.

The generation adequacy report is produced annually by EirGrid and sets out the forecasts for both the supply and demand for electricity over a seven year period. The most recent report has identified a need for additional generating capacity over the next seven years to maintain security of electricity supply. East-west interconnection will afford Ireland direct and secure access to the British energy market where, I am advised, there is significant generation capacity available to enhance security of supply on this island. In addition, Britain is also developing interconnectors with mainland Europe to further contribute to security of supply and market integration.

The east-west interconnector will also enhance the competitive environment in the Irish electricity market by allowing third party access in a fair, consistent and transparent manner. This, together with the all-island single electricity market, should over time exert downward pressure on electricity prices. A significant percentage of Ireland's electricity needs are generated from gas — some 50% overall. In terms of fuel diversity, the introduction of the east-west interconnector to Ireland will be a major benefit by providing an external source of electricity which will reduce our dependency on gas-powered generation.

The east-west interconnector will help support the increased penetration of renewable generation, particularly non-dispatchable wind generation in the Irish market. Reserve supply is required to provide back-up for wind generation at times when the wind is not blowing. The east-west interconnector will provide the capacity and stability that is required and will increase the extent to which renewable generation can be accommodated on the transmission system. It will also offer potential opportunities for export of Irish wind generated electricity. Surplus power can be shared with Britain in times of high wind generation. In times of low wind generation power can be imported from Britain.

We have set ourselves ambitious targets of progressively achieving 33% of our electricity consumption from renewable sources by 2020, with 15% the target for 2010. The recently published all-island grid study shows the possibility of up to 42% of electricity being provided from renewable generation by 2020. This study identifies the east-west interconnector as a key enabler for delivering our ambitious national and EU renewables targets.

It is for these reasons that the Government has attached such a high priority to the delivery of the east-west interconnector. On foot of a Government decision in 2006 the Commission for Energy Regulation was requested to arrange the design of a competition to secure the construction of a 500 MW interconnector at the earliest possible date before 2012. The Government also decided that the interconnector will, as a national strategic asset, remain in public ownership and will be owned by EirGrid.

To oversee and ensure completion to schedule, a high-level co-ordination group has been established under the chairmanship of the CER and comprising representatives of EirGrid and my Department. I am advised that work on the project is progressing well. In recent weeks EirGrid, overseen by the CER, launched a competition for the design and construction of the interconnector. I am also advised that the contract for design and construction will be completed by the end of September this year, when the successful bidder will be announced.

EirGrid is advancing work on route selection, planning and foreshore permissions and technical specification of the interconnector. It has secured Woodland in County Meath as the connection point for the interconnector on the Irish transmission system. It has also obtained a formal connection offer from the UK national grid for a site at Deeside in Wales, which it has accepted. EirGrid has begun work on a marine survey to determine the most suitable route for the undersea cable. When this survey is completed, the final route to link the two connection points will be determined. It is, therefore, very timely that this Bill is brought forward for consideration by the Oireachtas. It provides a clear signal of the Government's support for the project. This Bill has been identified as a priority item in the Government's legislation programme and I trust I can count on the support of the Members of this House for its provisions and smooth passage.

The Bill will provide EirGrid with the legislative underpinning to advance to the next stage of the east-west interconnector project and ensure there are no delays. I am advised that the end of September 2011 is targeted for the completion of works, with the end of March 2012 targeted for the completion of commissioning and testing and the start of commercial operations.

In addition to providing for EirGrid's role regarding interconnection, the Bill also provides generally for future interconnection. The Bill makes some minor amendments to the Electricity Regulation Act 1999, to which I will refer as the 1999 Act. The Bill inserts a new subsection in the 1999 Act to provide that a person operating an interconnector without the appropriate licence will be guilty of an offence and liable to a fine or term of imprisonment. This ensures consistency with offence provisions for other licensable activities. For example, it is already an offence to supply or generate electricity without the appropriate licence.

The Bill provides further clarification of the position of interconnectors with respect to the transmission system. Section 2A of the 1999 Act provides that the cost of interconnectors would be recovered through transmission system charges. This Bill provides that those costs are only to be recovered in the case of a regulated interconnector, such as the east-west interconnector, or where the CER determines that it is in the public interest to do so.

The new provision facilitates the development of merchant interconnectors, which are privately funded and developed. Merchant interconnection projects are financed through charges for the use of the interconnector, rather than being compensated through transmission system charges. These new provisions are in line with the EU regulations in respect of merchant and regulated interconnectors.

Greater interconnection between member states is a key priority for the European Union to ensure the effective operation of the internal energy market. The importance of the east-west interconnector project has been formally recognised at European level and it has been designated a "project of European interest", which is the category of projects with the highest priority at EU level.

The east-west interconnector is included in the EU trans-European networks priority interconnection plan. The priority interconnection plan proposes specific measures for the progressive completion of critical energy infrastructure projects. As a tangible measure of support, funding totalling some €2.5 million is being made available under the EU trans-European networks programme to advance the study phases of the east-west interconnector project.

As a peripheral island nation, Ireland strongly supports the progressive development of European regional electricity markets underpinned by greater interconnection. This work is a natural progression from the development, in co-operation with the Northern Ireland authorities, of the all-island energy market and the launch of the single electricity market, SEM, in November of last year.

My Department, the CER and EirGrid, along with their UK and French counterparts, are actively working towards the development of a regional electricity market as part of the EU Commission's initiative to develop regional energy markets. This initiative will be underpinned by greater interconnection. The current focus is on the delivery of the second North-South electricity interconnector and the new east-west electricity interconnector no later than 2012.

At the Government's request, EirGrid will undertake cost-benefit analysis and feasibility planning for further interconnection with the United Kingdom and potentially with the rest of Europe in the longer term. This analysis will take account of any proposals to develop interconnection on a merchant basis.

The Bill is an important measure in the delivery of the Government's energy policy. I therefore look forward to listening carefully to the views of Members of the House and their assistance in passing it into law.

Deputy Simon Coveney

It is unusual for the Minister not to use his full allocation of time, particularly when he is talking about energy issues. I welcome the opportunity to do so.

Deputy Eamon Ryan

There was a lot of talking yesterday.

Deputy Simon Coveney

That is true.

Fine Gael will not be opposing this Bill and it welcomes its introduction for the very straightforward reason that it believes the east-west interconnector between Ireland and Britain needs to be built as soon as possible. EirGrid is the obvious body to manage this task.

In essence, the legislation is necessary to ensure there will be no further delays regarding this project, which should be completed by now. It has taken too long. The delay is not EirGrid's fault. Approximately eight years ago, the then Minister announced that he supported the concept of an east-west interconnector and that he would invite private sector interests to build it. Over a long period, the State has come to recognise that the private sector did not have either the capacity or interest to complete the project in a manner with which the State would be comfortable. EirGrid is now managing the project and this is positive. My experience of the organisation is that it is highly competent and efficient, although I am somewhat critical of its PR activities in respect of the so-called North-South interconnector and the debate on whether the infrastructure should be underground or over ground. However, this is not related to its ability to get a job done.

As has been stated, the aim of this Bill is, first and foremost, to expand the functions of EirGrid to include construction of an interconnector and the ownership and operation thereof, subject to authorisation by the CER.

The Bill will amend the current Electricity Regulation Act 1999 to clarify the position of interconnectors not owned by the ESB. It will also make it an offence to operate an interconnector without appropriate authorisation by the CER. Additional appropriate powers are being given to the CER in recognition of the fact that, for the first time, a major section of grid infrastructure is being constructed that will not be owned by the ESB or be on the ESB's balance sheet. This is a major departure in itself.

The Bill will provide for the establishment of subsidiaries by EirGrid to increase its statutory borrowing capacity, which is obviously necessary to raise funds for the project in question, and to provide for capital expenditure by EirGrid.

We are facilitating the transition of EirGrid from a management company for an ESB-owned asset to a State company in its own right tasked with managing an asset on behalf of the State that it is to construct and own. Some policy issues arise from this strategic decision. In this regard, we must consider the Government's attitude to and policy on the separation of assets within the ESB and whether it plans to proceed with taking the rest of the grid out of ESB ownership and putting it into the ownership of EirGrid. I remain to be convinced but I believe doing so would make sense, particularly in the context of owning interconnectors. It makes sense in principle for an interconnector to be an extension of the existing grid, which will essentially plug the Irish grid into the British grid and allow a flow in both directions such that power can be purchased or sold, as deemed appropriate.

Strategic issues arise when we accept the principle that ownership of the interconnector is separate from ownership of the grid. There is private interest in building two further east-west interconnectors. Having the ownership of the interconnector between the Irish and British grid in private ownership has potential knock-on effects on security of supply as we would have a private operator who is in it for profit essentially controlling the supply of power coming to and going from the Irish grid. There are some regulatory issues in that regard that need to be explored further. Having said that I am in favour of more interconnection through either the private or public sector. Given the choice my preference would be that the grid in Ireland should be owned and managed by the same body that owns and manages interconnection so that essentially our grid is expanding and plugging into other grids, initially in Britain and hopefully at some stage in the future places like France also.

I wish to talk about the importance if interconnection on three levels, the first of which is security of supply. The present energy discussion is dominated by price and environmental concerns. Security of supply is perhaps more important than those issues. Ireland is in a very vulnerable position should the supply of fuel such as coal, gas and oil dry up or become too expensive. Ireland's energy import dependency is 91%. When this is compared with the UK at just 66% one begins to realise how exposed we are to price fluctuations on world markets or simply a cut-off of supply when only 9% of our fuel is indigenous to Ireland through peat, gas or renewable sources.

Other countries have found solutions to this issue. Most of them have turned to nuclear power generation, for example, to try to reduce their dependency on imported fuel. I do not believe that is an option for Ireland at the moment and I hope it will not be an option in the future. However, obviously we cannot shut our minds entirely to the option as technology advances and as issues relating to nuclear power develop. At the moment the public do not want us to move in that direction and rather want to see an ambitious leadership role being taken by Government and in particular the Minister for Communications, Energy and Natural Resources to roll out renewable energy projects across the country, which is being facilitated by grid studies, grid preparation etc.

The effect of an interconnector on Ireland's security of supply is to give more capacity to plug into other electricity grids thereby making us less reliant on our existing sources of fossil fuels. Not only will we have a backup but we will also have a viable alternative to importing large amounts of fuel. In other words we will be able to import energy directly on the grid as opposed to needing to generate everything here ourselves. We had a market in the Republic of Ireland which developed into an all-island market with some interconnection to Great Britain through Northern Ireland and are now hopefully creating an electricity grid for Ireland and Britain. If we continue to ramp up our interconnection capacity between the two islands, at some stage in the future we could get to what the Minister refers to as regional grid infrastructure whereby the north west of Europe could at some stage develop into a north-west European grid, if one wants to call it that.

That has happened in other countries, for example with the interconnection between Scandinavian countries which is far more ambitious than what we are achieving here. That is necessary as it is recognised across the European Union that our standard sources of fuel for energy are running out. They are certainly running out in the areas from which we have been used to getting a supply. It would be safe to say that within ten years gas supply available for export from European countries will simply run out. The European Union needs to prepare itself for a time when we will be importing all of our gas from Russia, Kazakhstan, the Middle East and so on.

The Lisbon reform treaty makes it clear that the European Union is preparing itself for that eventuality. For Ireland's sake I hope we will be able to negotiate collectively as a Union on issues such as gas supply in particular because of the gas line infrastructure across the European Union. Otherwise we will see companies like Gazprom being able to flex huge political muscle with countries in the European Union. In that scenario a small country like Ireland would not have the influence it needs to get a good deal on affordable gas for Ireland. Given our reliance on the importation of gas we are very vulnerable to that kind of scenario which is why I encourage the Minister to review gas storage issues, including LPG storage. He should consider existing resources such as empty gas fields that could potentially be used to store gas purely for security of supply reasons. From speaking to representatives of Bord Gáis I understand that if our gas supply coming from abroad, which is nearly all of it — some still comes from the Kinsale gas field, were to be cut off we would have approximately four days of supply. That is a very vulnerable position and needs to be addressed even if it costs the State some money to do so.

I have made my point about energy security and the need for us to be part of a much wider grid, which would put us in a much stronger position. The next area relates to price competitiveness for energy. I held this portfolio approximately six years ago. Prior to me being given this brief Ireland had been struggling to open our energy generation business to competition. We have had some limited success in this regard in terms of increased efficiency, increased customer choice and a reduction in prices. Interconnection will automatically open up the possibility of importing energy to provide competition for energy generators in Ireland.

The cost of electricity in the UK over the past five years has consistently been between 8% and 15% cheaper, depending when the measurement was made, than in Ireland. As long as interconnection comes at an affordable price, it makes sense for us to import excess energy from the UK grid to Ireland, when appropriate. If nothing else, this will introduce competition to the Irish electricity market and may help drive down prices and increase choice and services for businesses and households.

I will put the situation starkly. A business that seeks to set up in an English speaking country in the European Union will consider Ireland and Britain. The latest figures show that the cost per 100 KW hours is €11.50 in Dublin and €9.50 in Manchester. The difference between the two is 18%. My figures are from 2007; there may be more recent figures that are different due to exchange rates but changes due to exchange rates do not reflect anything proactive that we have done. Prices in Ireland and Britain should be levelled out; this is already happening in the all-island market but I hope it goes further if we continue to build interconnection capacity from an east-west perspective.

Regarding environmental sustainability and renewable energy, when many people speak of Ireland's capacity to produce renewable energy they often limit their vision of what can be achieved on the basis of our energy needs on this island. The Republic of Ireland's total usage of power comes to between 5,000 and 6,000 MW. People make calculations loosely, based on the percentage of the market that can be provided by renewable sources such as wind power, wave power, tidal energy, biomass, bioenergy, bio-fuels and so on. We should not limit our thinking in this way and, to be fair to the Minister, he does not do this.

The electricity grid study the Minister launched some months ago presented different portfolios for Ireland's energy mix. The most ambitious one is portfolio 6, which has 8,000 MW coming from wind energy, but it is automatically dismissed as not achievable. Portfolio 5, the next most ambitious, has about 6,000 MW potentially coming from wind energy and this is what we are aiming for. This indicates what the Irish grid can manage in terms of wind power coming onto the grid in an intermittent way, without substantial storage capacity, which would allow it to be held and used at peak power times, and without substantial interconnection capacity.

If we look at this in a more ambitious way we could say that Ireland should not be limited in terms of how much energy it can produce from renewable sources. Instead we should see this area as one in which Ireland has a natural competitive advantage because of average and net wind speeds here and wave and tidal resources. Ireland should be a green fuel source for other parts of Europe and the only way this can be achieved is through ambitious interconnection projects. That is why I encourage the Minister and EirGrid to get this job done as quickly as possible. He should also encourage the private sector interconnection projects that have been proposed to proceed as soon as possible. The Minister could also examine the possibility of direct interconnection with countries like France, rather than rely on going through the British grid to access the mainland European grid.

It is true that, in terms of EirGrid's management, many megawatts coming onto the grid from wind sources present something of a nightmare scenario. Wind turbines provide power approximately 35% of the time in Ireland and approximately 30% of the time in most other places in Europe, sometimes even less. Often power provided by a wind turbine is not needed because it comes at 2 a.m. or 4 a.m. when there is already plenty of capacity on the grid. From an Irish perspective wind power is the most advanced source of renewable energy but the problem is that it is also the most inconsistent. Consistency could be provided by the kind of massive scale Eddie O'Connor refers to when he speaks of an offshore European wind-powered electricity grid, which, in my view, represents magnificent thinking in terms of ambition; the number crunchers will tell us whether it is viable. It is our job to be ambitious, be ideas people and try to find solutions to an energy crisis that is looming globally, in Europe and in Ireland. From this point of view we must be ambitious in the areas we know can work.

In terms of the Irish marketplace and the Irish grid, the only way we can build wind projects on the scale proposed and in the pipeline is to invest more significantly in finding solutions to energy storage. We must be able to capture the energy that comes from a wind turbine at 3 a.m. and store it through the use of hydrogen or batteries. We could even pump water uphill so that it can flow down during peak periods, as is done at Turlough Hill. We must find effective methods of storage and examine large-scale storage projects that can be linked to the kind of wind energy ambition that now exists.

I have a significant concern and this is as appropriate time as ever to mention it to the Minister. Under the Gate 3 process of giving grid connections to wind energy projects less than 2,000 MW will be given out and this applies to quite a lot of projects. However, some 8,500 MW of wind projects seek connection through Gate 3. More than 6,500 MW of wind projects are in the pipeline. Some of these projects are onshore and others offshore, comprising farmers, consortia and large businesses, all of which have heavily invested in securing planning permissions and consultants to examine costings of construction and connection to the grid. In the current scenario, they have no chance of getting a grid connection until 2020. Even if we reach the Minister's target, seen by many as ambitious, of 4,000 MW to 5,000 MW wind-energy generation by 2020, there are still these projects across the country which will never get a grid connection.

What does one say to a consortium, excited about the possibilities of wind-energy production, which has spent €300,000 on planning permission and consultants' reports on construction and grid connection when one knows with the Gate 3 phase they do not have a chance?

Deputy Eamon Ryan

On a point of information, I do not believe 8,000 groups have planning permission.

Deputy Simon Coveney

Yes, the Minister is correct about that but there are substantially more groups with planning permission than can be granted connection.

This problem will get worse. Most in the industry believe the Minister has given a general price support allocation for offshore wind farms which will result in large scale farms being proposed. In the overall context of the Minister's target of 4,000 MW to 5,000 MW generation by 2020 from wind energy, most of that potentially could come from offshore sources.

Fine Gael strongly supports the need for energy storage and interconnection so that Ireland can become the green-eyed Arabs of Europe. This phrase was coined by a Norwegian expert who described herself as coming from the blue-eyed Arabs of Europe. The same expert recently explained to me that when Norway first discovered offshore oil 40 years ago, exploiting it was initially dismissed as too expensive due to restrictions in drilling technology. Now, the successful exploitation of its offshore natural resources is seen as the country's greatest progressive thinking. She claims Ireland is not thinking ambitiously in exploiting its wind resources. We need to take notice of this and examine the facts and figures as to what is possible.

Interconnection is a good idea but are we ambitious enough with it? The North-South interconnector has a 400 MW capacity while the proposed east-west one will have a 500 MW capacity. Norway has a 2,800 MW interconnector between it and Sweden; a 1,000 MW one with Denmark; a 100 MW one with Finland and a smaller one with Russia. It is building a 580 km, 700 MW interconnector with the Netherlands. That is a total of 4,650 MW of interconnector capacity coming in and out of Norway. If Ireland is going to be ambitious about renewable energy and complete the Minister's vision in what can be achieved in the next 20 years, interconnection must play a far larger role than we are envisaging. EirGrid will be central to that planning.

We must also ensure the next proposed interconnector does not take eight years to complete from initial planning to final construction. The private sector company building the interconnector between the Netherlands and Norway, almost 600 km long, can do it in three years. I accept complexities arise with connections, construction, seabed surveys and planning permission. Those problems, however, exist elsewhere and they manage to get over them.

The North-South interconnector is a misnomer as it is part of an all-island grid linking Northern Ireland with the Republic. A classic interconnector is a DC line that electricity can be taken from and put into on an end-to-end basis. The proposed North-South interconnector through counties Meath, Cavan, Monaghan and into Northern Ireland will be a 400 kV AC line.

I give credit to North East Pylon Pressure which has undertaken major studies to make the case to the Minister, the Government and Opposition that technology allows this infrastructure to be placed underground. I welcome the Minister's appointment of an independent consultant to examine this claim. It will have large implications on future grid development projects which will be important to facilitate the renewable energy projects we are promoting. Renewable energy cannot work without an adequate grid to facilitate it.

A cost analysis of using overhead cable for the proposed North-South interconnector may show it would be cheaper than putting it underground. However, if the public relations exercise with people living in the affected areas in counties Meath, Cavan and Monaghan is not managed effectively, objections and obstruction to it could mean construction could take up to six years with rising costs. In that case, the final analysis might show it may well be cheaper to put the infrastructure underground in the first place. The Minister needs to take this type of thinking into consideration.

I will return to other issues such as ownership of the grid on Committee Stage.

Deputy Liz McManus

Listening to Deputy Coveney comparing infrastructure construction times in this country and others, I was reminded that the stretch of road between Bray and Greystones in Wicklow took nearly as long to build as the road bridge between Denmark and Sweden.

This enabling Bill is not controversial and one we in the Labour Party are happy to support. Some issues arise from it, however, which we want addressed. The growth in our population and in energy use requires investment in the energy infrastructure that has in the past experienced under-investment. The margin of cover between demand and supply is so narrow, fears have been expressed about outages resulting during winter months. Over the next 20 years demand is estimated to grow by 70% to 80% which will require the connection of 7,000 MW of new generation plant to the network.

Creating an all-Ireland market was a significant step forward, ensuring security of supply and greater efficiencies. Paying tribute to those working in EirGrid and their counterparts in Northern Ireland is worthwhile as the all-Ireland market they succeeded in creating has been working ever since. Building interconnectors between Ireland, Britain and, if necessary, beyond is the next logical step and is a welcome development. It would offer us the facility to buy additional electricity from abroad and to sell excess electricity. In doing so, we could fully exploit our natural resources, in particular wind energy. This development would ensure energy security, a significant current issue.

Were the Minister consistent in his approach, it would be helpful. It is regrettable that, for example, he has obfuscated on the issue of nuclear power. The Minister has no intention of pursuing the nuclear power option. His call for a debate on the issue is an evasive technique, a smokescreen. Having called for the debate, he refuses to initiate it and ducks the matter when it is raised. Were the Minister's open approach a genuine one, he would initiate the debate rather than try to offload it on to an Oireachtas committee. Were he honest on this issue, he would first lift the statutory prohibition on the building of nuclear power stations in Ireland. It is illegal to build a nuclear station in Ireland. Were the Minister genuine in his call for a debate, he would present the case in the Dáil for legalising nuclear power and proceed to debate the question of whether we should avail of that option.

Deputy Eamon Ryan

In opposition, I called for the same thing, as the committee would be the appropriate place.

Deputy Simon Coveney

The Minister is in government now.

Deputy Eamon Ryan

I have not changed my position.

Deputy Liz McManus

Somehow, it is the Minister's belief that if he stated something in opposition, it would have the same bearing in government, but it does not. He is in a position to do something.

Deputy Eamon Ryan

My opinions have not changed.

Deputy Liz McManus

If the Minister is to be consistent in his opinions, he must act in a way——

Deputy Eamon Ryan

I have been consistent.

Deputy Liz McManus

——that recognises the Parliament's integrity. We should not waste time debating something that is illegal and to which the Government has repeatedly displayed its opposition simply to let the Minister off the hook. If he wants a debate, he is in a position to set the conditions and the context. It is self-serving for him to reply to my parliamentary question that he wants a debate, but that "the Government fully intends to maintain the statutory prohibition on nuclear generation in Ireland". Let us see consistency. It is worth noting that in terms of future policies on power generation, we have a prohibition on nuclear power. It is for the Government to propose removing the prohibition if we are to consider the option seriously. I oppose the option, but it is a matter for debate, which is not what the Minister wants. It is also worth noting that we are already using electricity from nuclear power supplied through the interconnector between Northern Ireland and the rest of Britain. More will be supplied via the interconnector under discussion in the context of the Bill.

The all-Ireland grid study has provided a clear strategy based on maximising renewables and wind in particular. These natural resources are free, but significant investment is required to harness them. The study states: "These additional costs will need to be recovered within the price of electricity charged to end users." The estimated figure is approximately €650 million and €1 billion for the island as a whole. It is clear that the customer will pay. We must remember that in terms of electricity bills, the customer is already paying more than the European average.

Recently, the ESB launched its strategic framework to 2020, the cost of which will be €22 billion, €4 billion on renewables, €6.5 billion on smart metering and other structures and a €11 billion investment in networks. The customer will foot the bill. It is clear that the intention is to use the customer indefinitely as some kind of cash cow. In reply to a parliamentary question, the Minister stated: "All investments in electricity transmission and distribution networks are funded through use-of-system charges approved by the Commission for Energy Regulation". This over-reliance on the consumer is a matter of some concern and it is important that a full economic analysis is carried out to ensure that it is sustainable as well as fair to depend solely on the consumer to fund such ambitious plans.

This Bill provides for EirGrid to construct, own and run an interconnector and to borrow up to €750 million. Elements of the Bill are straightforward and I do not foresee a problem in that regard. It is worth noting that the transformation in the energy market has been successful in the sense that we have been able to ensure public control over key facilities while opening the market up simultaneously. There is a lesson to be learned here.

Yesterday when we debated the Estimates for the Department, the Minister stated that a token amount had been inserted into the budget in case it proved more advantageous for the Government to raise the loan rather than for EirGrid to do so. It would be helpful if the Minister would clarify why such an approach is being adopted in this case as it seems to be unprecedented in terms of Government assistance for energy infrastructure. Exploring what is occurring would be of interest. The norm has been for the customer to pay and the State to benefit. The dividend paid to the State, for example, by the ESB is considerable — approximately €80 million, I cannot remember the figure — and it goes directly into the maw of the Department of Finance. It would make more sense to permit the ESB to plough this funding into its own development.

This is not the Bill that was promised. In the briefing given to the Minister upon taking office, the EirGrid Bill was an immediate priority issue, but it was a Bill to transfer ownership of transmission assets from the ESB to EirGrid. Priority drafting of the Bill was promised, but it has stalled nine months on. To break up the ESB in the way proposed has serious implications and the Labour Party is not convinced that any break-up of the ESB or the transfer of its core grid and generation assets makes sense. It is likely that the proposal to remove the transmission system from the ESB is unnecessary for competition and threatens the long-term national interest and energy security of the people. The introduction of the all-Ireland single electricity market and the entry of new providers have altered the dominant role of the ESB.

With further proposals for divestment and site sharing in the White Paper, the ESB is set to become a mainly network company with some key strategic generation assets. The Government's proposal to transfer assets to EirGrid opens up the possibility of the emasculation of the ESB as a player here and internationally and, while not the Minister's intention, could lead to the future privatisation of the ESB with all the dangers of externally controlled generation in a small isolated market.

The Minister should consider the change of heart that has been taking place at EU level. There is no longer a conviction that competition is best served by dismantling state power companies and selling them off. France, Germany and six other EU countries have argued that the Commission's proposals to unbundle vertically integrated energy firms will not achieve their desired effect in terms of more grid investments and lower energy prices. Obliging energy-producing firms to give up their transmission assets is "not compatible with constitutional law and with the free movement of capital", according to the letter to the Commission signed by France, Germany and others, which argues that "no correlation can be found between the implementation of [ownership unbundling] and the levels of prices and investments which are actually determined by many other factors".

Deputy Eamon Ryan

Our interests are not necessarily the same as those of France or Germany in this regard.

Deputy Liz McManus

I do not suggest they are. I merely state there has been a change in thinking.

Deputy Eamon Ryan

In that event, I would be reluctant to cite them as authoritative sources.

Deputy Liz McManus

While the Minister can be reluctant, I will cite them.

Deputy Eamon Ryan

I was simply stating my view.

Deputy Liz McManus

It is worth including the point in the debate because this is an extremely important issue. When I have raised this point in the past, the Minister has adopted what appears to me to be a highly facile view to the effect that as we have got this far, we may as well finish the job. This underestimates the impact on the ESB of the proposed break up in terms of its capacity to compete. While Members already have learned that trade unions are extremely concerned about this issue, it is clear, particularly given the dominance of Russia, that changes of policy and opinion within Europe have occurred and it is worth our while to listen. My only point at present is that I hope the Government is listening. While I am unsure it is, I hope this is what is happening.

All Members desire to see EirGrid develop its capacity and to do so in compliance with the requirement to assist in the battle against climate change. The Government and EU targets set a major challenge for us to meet. While the greatest responsibility for CO2 emissions arise in the transport and agriculture sectors, much can be done to militate against global warming in the energy area. Whatever happened to global warming? It is raining outside.

Deputy Bernard J. Durkan

That is another matter that must be reconsidered.

Deputy Liz McManus

To be fair, the Green Party Members did promise there would be more rain.

These issues are becoming more central. I refer to environmental concerns and concerns regarding energy security such as, for example, the recent increase in the cost of oil to a record high of $120 per barrel. This represents a fivefold increase in oil prices since 2002. Obviously, Ireland does not produce its own oil and is highly energy-dependent. I understand that our total energy import dependency is well in excess of 91% at present. We must make radical changes and in general, the Minister has Members' support. I hope he accepts there is a genuine commitment in this regard and understands it is not an easy task to turn around and adopt a new approach in respect of energy. While I understand that opportunities were missed in the past, ultimately it is the job of Members to ensure that when policy is developed, it is fair and meets needs. Members must ensure that such requirements always will be complied with.

The Labour Party has a clear energy strategy. It wants to ensure there is a clear and reliable supply of energy, as well as a long-term sustainable environment. We must ensure that energy is affordable. The poorest members of our society are those who often bear the greatest burden in respect of energy costs. In this context, I will refer to a small matter that would have made a great difference. The Minister for the Environment, Heritage and Local Government recently omitted to state that he would introduce a waiver scheme for waste charges for the poor and the elderly. The Labour Party has argued for a national waiver scheme to assist people pay for waste. Obviously, the costs of waste disposal have increased greatly. This constitutes an example, which also is applicable to the energy arena, in which people on low incomes are not being supported. This applies to waste management, ensuring that people's houses are energy efficient and to rising energy bills. It is estimated that between 60,000 and 100,000 households suffer from fuel poverty. The people affected must be deemed to be deserving of support and I do not believe that ignoring them will enable us to develop a policy that is both fair and efficient and which meets people's needs.

I greatly welcome the proposal to have an interconnection between Ireland and Britain. A number of interconnections will be developed. One already is there and there is potential for more. We may connect to mainland Europe at some point or we may depend on the British connection. However, such interconnections are indicators of a new relationship between these islands and between North and South that will ensure, in a practical way, that we work together for the betterment of our societies and for the environment as a whole. It offers us an opportunity to develop natural resources, particularly in respect of wind power, that had not been developed in the past. The Minister is keen to encourage technology development in Ireland and hopefully this can be achieved and manifested in practical ways because the costs of technological investigation and experimentation often can pose great difficulties for smaller entrepreneurs or innovators.

I wish to cite some concerns. Although I raised them by way of a parliamentary question, it was ruled out of order. Although I have been in the House for a while and have shadowed many Ministers, I have never had so many parliamentary questions ruled out of order by a Minister. For some reason, however, this Minister deflects many parliamentary questions. I am bemused by this practice because I do not consider that to be his inclination. In respect of offshore wind, I asked how many turbines had been granted approval, what were their heights and what is the current position because just before the election, the Green Party Leader, the Minister, Deputy John Gormley, made a commitment that no new permissions would be granted without legislation permitting public consultation. I am sure the Minister has a copy of the relevant letter as I certainly have.

The question was deflected from the Minister's Department in a manner that I found difficult to stomach. Although I asked the question I am unable to get an answer. My understanding, although I am open to correction, is that permission for approximately 400 turbines was granted off the coast of County Wicklow. This has given rise to great concern because the public has not been given a chance to express their views, good bad or indifferent, on this development. The turbines in question, were they ever to materialise, would be sited relatively close to shore and would be very tall. Were they located on land, the normal planning process would apply and everything would be hunky dory. A decision would be made and people at least would have been consulted. However, no consultation process in respect of planning exists in respect of offshore wind turbines. While guidelines and regulations have been developed to prevent major visual intrusion or impact in other countries, this has not happened here. This is regrettable because offshore wind is a great resource and we must ensure it is developed in a manner that is not unduly intrusive. I agree the North-South line should not have been called an interconnector. There was an element of massaging involved inasmuch as calling it a "North-South interconnector" makes it sound important. It is not an interconnector and that word probably frightened people more than it impressed them.

The Minister has a difficult decision to make because if the underground option is chosen it will set a precedent for other infrastructure projects. I would love to see these lines going underground for various reasons, as would members of the public who live along the route. For environmental, visual, safety and other reasons, it would be a step forward but I do not know how feasible it would be and I suspect the report will not support that option. However, public concern has been so great that we need a full debate in the Dáil when it is published. I welcome the promise by the Minister to publish before the end of the summer session so that we can have a debate on it.

Notwithstanding that, I want this piece of energy infrastructure to proceed. In the context of our growing needs, it is vital that we have safe, reliable and flexible infrastructure which benefits both parts of the island and, in respect of the east-west interconnector, both countries in ways that would have been impossible to imagine in the past, despite the technological advances we have already made on undersea telecommunications cables. This is an exciting project which everybody wants to be successful and I welcome the Bill.

Deputy Johnny Brady

I wish to share time with Deputy Thomas Byrne.

Acting Chairman (Deputy Joe Costello)

Is that agreed? Agreed.

Deputy Johnny Brady

I welcome the opportunity to speak on this Bill. I will focus on the effect of the EirGrid proposal on my county and the pylons from Woodland through County Cavan to Northern Ireland.

Any potential health risk posed by overhead power lines is unacceptable. Pollutants from electromagnetic fields produced by overhead lines will subject the weakest and most vulnerable in our communities to the possibility of illness and distress. If technology can facilitate the laying of cables underground from Rush to Woodland, County Meath, consideration must be given to laying them underground the rest of the way to Kingscourt, County Cavan, and Northern Ireland.

There are a number of other reasons for considering the underground option. The negative visual impact on our landscape of the pylons will militate against the development of tourism in the area. The pylons will also have a detrimental effect on protected wildlife and their habitats and they will traverse areas rich in cultural and archaeological heritage and special areas of conservation. Another issue that must be borne in mind is the threat they will pose to property values along its route. Putting the line underground appears to be the safest means of ensuring a secure and reliable electricity service to the area. The possibility of over-ground pylons being part of the EirGrid plan for Meath has been a major cause for concern among local people, particularly those who live close to area through which the pylons may pass.

The main argument against the use of pylons is on health grounds, an issue that all Deputies will agree is of the utmost importance. Since 2000, 107 scientific papers have been published in peer reviewed journals, of which 69 linked electromagnetic fields to various forms of cancer, 30 were inconclusive and only eight showed no links. Research carried out in Britain in 2005 found that living within 200 metres of high voltage power lines increases a child's chance of getting leukaemia by 69%. Within 600 metres it was increased by an average of 20%. All technology carries benefits and risks which have to be carefully weighed at all times. I do not doubt the significant benefit of a sustainable electricity supply but in this instance the alternative option of going underground appears to eliminate risk and should therefore be given consideration.

Another reason for thinking carefully about overhead lines is ecology. The issue of climate change and our responsibility for greenhouse gas emissions has been brought centre stage. Putting the North-South interconnector and future proposed extra high voltage lines underground may be significantly more environmentally responsible than the construction of overhead pylons. Another advantage of going underground is a smaller carbon footprint due to reduced land use and material choice. While an overhead line requires a 60 m wide strip to be kept permanently clear for safety, maintenance and repair reasons, an underground cable of the same capacity requires only 10 m.

In today's world we are more aware than ever of the need to protect our environment. As the age of industrialisation and new technologies, the 20th century saw many advances. Our world has changed significantly in a relatively short period. This generation has been tasked with responding to the challenge of protecting our environment and undoing the damage that has already been done. By putting the lines underground we will be playing a small part in protecting the environment. The underground route would eliminate the noise pollution associated with overhead lines. We are all aware of the constant buzz that accompanies overhead lines which can irritate residents in their vicinity. An underground route also eliminates collision and electrocution hazards related to wildlife and, in particular, birds.

Farmers and landowners are opposed to the use of pylons on their land for a number of practical reasons. Farmers describe the difficulties of working around pylons in fields. An underground route would eliminate this problem completely. Farmers are also legitimately concerned about having to work on a daily basis under overhead lines. Nobody would want to put their own or their family's health at risk, regardless of how small that risk may be.

It should also be remembered that land and property devaluation can be a consequence of overhead power lines. I understand that planning permission for new houses will not be allowed within 200 m of an overhead 400 kV line, which virtually eliminates many fields with roadside frontage from planning applications. EirGrid proposes to place the lines closer than 50 m to existing dwellings. More than 60 studies have been carried out over the last 50 years on the impact of overhead power lines on the value of residential property. The most common claims cited in court cases in America are reductions in market price, properties being slower to sell and a decrease in sales volumes. Issues such as visual and noise pollution were often identified as negative influences on property values.

In assessing the choice of going over or underground, the issue of our heritage and landscape cannot be ignored. It is impossible to put a price on our special heritage because it is part of all of us. The north east is an area rich in heritage, from archaeological sites which are world famous to scenic landscapes that need protection from visually obtrusive structures. Locals are understandably concerned about the effect of overhead lines on areas that are of vast historic significance. While the issue of costs has been raised by those who are in favour of taking the overhead route, can a price be put on people's health and well-being and the heritage of a special part of our country? I have seen reports that suggest the additional cost passed on to the consumer due to going underground would come to no more than €2.20 per month. Is this too high a price to pay for peace of mind for thousands of people?

I am aware that there are two sides to every argument. I welcome the fact that an independent study on the EirGrid interconnector is taking place. The study commissioned by the Minister, Deputy Eamon Ryan, has broad terms of reference that allow it to examine several aspects of the interconnector, including the cost of putting it underground. This is an issue that requires careful consideration. The interests of the people living in the areas affected must be borne in mind at all times and must come ahead of any monetary or business considerations.

I thank the Minister for commissioning the study. We are all delighted he has done so and we await the outcome. We hope it will allow the cables to be placed underground.

Deputy Thomas Byrne

Like Deputy Johnny Brady, I am glad to speak on this issue. In the last review of constituencies when I became a candidate, Deputy Brady had to hand over several lovely areas such as Moynalty, Carlanstown, Nobber, Gibbstown, Kilmainhamwood, Oristown and Meath Hill. There is genuine fear in those communities with regard to EirGrid's proposals.

While this is a technical, enabling Bill, I am glad the Minister recognised the public concerns in his speech. He referred to the complexity of the task facing EirGrid. Would it be possible to make even slight amendments to the Bill in terms of what EirGrid may be required to do when it proposes projects above and beyond what is contained in the Planning and Development (Strategic Infrastructure) Act? When EirGrid comes to the town, there is never a show like it. Chaos reigns and people fear, as we have seen time and again. An extra level of consultation should be required specifically for EirGrid. There is nothing else like it.

I have been to meetings attended by almost the entire population of parishes, which I am sure has also been the experience in other counties. There are massive concerns, including with regard to health. One can read all the WHO studies one likes, but when one visits communities where there are already pockets of cancer, it is impossible to argue there is no health risk, particularly as many studies recognise this risk, as pointed out by Deputy Brady.

The people of County Meath are very concerned about the visual impact given our tourism potential and the innate beauty of the county and the wildlife. I am conscious that Gibbstown is a Gaeltacht area. It is a great community but there is much fear about the impact on the culture and heritage of the area.

Planning permission is one of the biggest issues for families in rural Ireland at present, particularly for those working in agriculture. There will be many restrictions in the north east if this project goes ahead. The right of people to live on their own land and contribute to their communities will be put in serious jeopardy.

The Minister gladly took on board the huge public concern. He made a wise decision to commission a study because there are arguments for and against the proposal. While EirGrid put up a very strong argument that the cost of its plans is low, what price our health, environment and heritage? I have met people who claim the lines could be put underground for a fraction of the cost and in a simple way. What the Minister has done with the independent study is very welcome, as is its short time frame. We look forward to the findings and hope the study will provide what we consider to be the right answer, which is to put the lines underground.

To do that would have major implications throughout the country. There are already many 400 kV lines. If, as we hope, the lines go underground in counties Meath, Cavan and Monaghan, then lines elsewhere would also have to be considered, and future projects would have to be undertaken along the lines of the findings of this report.

The Government is often accused of not planning developments but it cannot be accused of not planning for future energy needs. Interconnectors are part of this process and the people of Meath accept this. They are always happy to see progress, for example, with regard to the M3. The M3 is a balance between the needs of our people and protecting our heritage but EirGrid's proposals for County Meath are significantly unbalanced and balanced against the ordinary man and women in the lane and road — we do not have many streets in north Meath.

The Government is focused on planning, as it must be because energy is a key requirement and the country must be kept alight. We can see the result of the Israeli blockade in the Holy Land, where the UN is running out of fuel and may have to stop operations. That is a particular case concerning energy supply. We must look after this country for the decades and generations to come. The people will support the Government in this regard and will welcome anything which helps them to plan their daily lives and businesses better. However, they demand that the lines be put underground. I will give them every support I can.

Deputy Bernard J. Durkan

My colleague, Deputy Seymour Crawford, should have been first to speak. I am grateful to him for allowing me to speak first because I must travel to another region later this evening.

I am glad to have an opportunity to speak on the Bill. As the Minister knows, we soldiered together in a common cause on these and similar issues in the past four years or so, certainly in the past two and a half years. I am glad some of the thinking process that was put in place at that time is coming to fruition and that we are moving in this direction.

It is very important from the perspective of the most important people of all — the consumers — that the interconnector is in place. It should be available and accessible so that in the event that we wish to sell some of our product, we can do so, and if we wish to purchase product from other jurisdictions, for valid reasons, we can do that also. This is part of the reinforcement of both the European grid and the national grid, which is very important.

The proposal in the legislation is that the grid will remain with EirGrid and in its control, unless the Minister gives permission otherwise. The present Minister is unlikely to give such permission, but one never knows. We cannot think too far into the future, other than to say that, from past experience, it is very important that the State would hold firm control over a development of this nature, whether it be the North-South or east-west interconnector, but particularly the North-South interconnector as it is likely to happen first.

The east-west interconnector is hovering somewhere. There was originally provision for an interconnector to be developed by public private partnership or joint enterprise. I do not know how quickly it is progressing but it needs to be accelerated. If this country wants to maintain its economic expansion and development to the same extent as before, to which we should aspire, we must have access to a reliable and extensive power grid.

As noted by other speakers, in building up the various alternatives of electricity generation, we will be able to offload or sell product at will provided we have interconnectors available. We cannot store or bottle electricity yet, although I am sure that will happen in due course. However, in the absence of that technology, it is essential we have an interconnector to develop our electricity industry. It is essential to recognise that it should be used as a means of developing the extent and role of our electricity industry, not as a means of copping out or importing energy of all descriptions. It must be to facilitate both directions because our alternative energy in the entire area could be threatened in terms of development and expansion if we relied too much on the imported product. I have made that point to the Minister previously in committee and it must be borne in mind in the future.

I am aware the Minister has set up a high powered committee to study the question of underground versus over-ground cables, which is a thorny issue. I have repeatedly put down questions in this House over the years to try to determine the degrees of cancer county by county and by region. That would give us some indication of what we are dealing with in terms of absolute proof. We can speculate about it. The Minister is aware we had the debate in the committee on the issue of electromagnetic waves and the serious damage involved. We have had proof and counter-proof, contradiction and counter contradiction until we were almost blue in the face. Groups of experts from both sides confused each other, and in the process thereof confused us, as to whether one or either was the right opinion. That major argument will continue until we get proof positive and that can only be done by way of statistics and those statistics can be gleaned only by using the kind of information I have suggested. The Department of Health and Children could do it or even the Department of Communications, Energy and Natural Resources, if it so wished. We can then highlight authoritatively the areas throughout the country that show a prevalence of cancer cases of one kind or another. It is not rocket science. We should just get the proof.

The visual impact of over-ground pylons is another issue because they can cause problems in tourist sensitive areas. We had that debate previously in committee also and it is difficult to argue against putting cables underground in a tourism sensitive area with lovely vistas. Erecting pylons along the skyline does not sell tourism. The option, therefore, is to opt for underground cables.

In the argument for going underground the case has been made that it is done in Holland but Holland has a vastly different terrain. The subterranean formations in the Netherlands are vastly different from the subterranean formations in Kerry, Donegal and such places.

Another issue that arises is distance. There is a huge difference between the journey across the Netherlands and the journey from Cashel to Burtonport, for instance, or somewhere like that. A fair amount of undergrounding would be involved in that and the substantial cost factor arises but it must be examined for two reasons, namely the visual impact and the possible health hazard. We should either make up our minds about it or stop talking about it. If expert groups and committees eventually come up with a conclusion the Ministers do not like they can abandon, adjourn or strangle the committee, so to speak. This is likely to become an issue that will not go away unless the issues are addressed. It could have a major effect on the development of the electricity industry in terms of transmission here and I ask the Minister to give some consideration to that.

I want to mention briefly the importance of the development of wind and wave energy and all that goes with it. There will always be environmental side effects. Objections will and have been made to the windmills or turbines on hill tops. We cannot please everybody all the time but in the event of a serious problem arising, the Minister and future Ministers must determine what we are likely to be faced with 20 or 25 years from now and decide which is the lesser of two evils. Do we want to be able to provide a service and how can we provide it or run the risk of there being insufficient power to meet the requirements of the grid? That will be the crunch factor. The Minister knows that as he is very conversant with it. The defining issue will be how to determine the full extent of the requirement in 20 or 25 years time, recognise the means of transmission and what must be done to deliver that to the public, and the need to ensure we have security or continuity of supply as the case may be. Those three factors are crucial because it will be important to be able to tell the consumer now that in 20 or 25 years they can rely on continuity of supply, a competitively priced supply and that their kettle will boil in the morning when they want to make a cup of tea or coffee. Nothing will concentrate the mind more than absence of energy in that case.

I am aware other legislation is promised on the break-up of the ESB. One changes one's mind from time to time about matters of this nature. I was involved in producing a policy on the break-up of the ESB. I was not as specific as the Government at the time, and the Minister will be aware of that, but I supported the concept of sub-dividing the ESB under the various headings. That is welcome provided the customer enjoys the benefit accruing from it in terms of cost, competition, efficiency and quality of service. There is no sense in having competition among a multiplicity of groups responsible if the consumer is left wondering which of them to approach to have their lights turned back on. It is of no consolation to anybody if that consumer is wondering whether it is the grid, the generator or the person in charge of transmission and distribution that is responsible. I ask the Minister, who will make decisions in this area and will have a major influence on it, having spoken to the various interested bodies, to consider that aspect carefully.

The notion that we must do this because of European legislation is nonsense and wrong. It does not work that way. European legislation is part and parcel of what we contribute to, which becomes European legislation, as the Minister knows well.

We had a dreadful experience with Eircom. I am not blaming Eircom but what an appalling journey to come to where we are from where we were. We went from the head of the posse ten years ago in terms of the development of telecommunications in the European pecking order to a position where we are playing catch-up. That is appalling and it came about as a result of bad decisions. I do not say that because I held that view all along. Various parties in the House, including my party, were in favour of the procedure being followed at the time. I was not and was concerned about it. I was subsequently proved to be correct but I am not saying it because of that. I say this because we must learn from our past experiences. There is no point going through hardship and the barbs which come with it unless we take lessons on board and act so it does not happen again.

Somebody suggested, in the context of Aer Lingus, that in changing services from Shannon, the company had a duty to its shareholders. That is correct, as all companies have a duty to shareholders. However, it is not the ultimate and only responsibility, and there is also a duty and responsibility to the consumer, the State and the greater common good. This must be borne in mind at all times and can never be set aside, buried or subsumed by something else. We must recognise that for some unknown reason, we have not come to grips with that concept in this country just yet.

Privatisation is everywhere in the United States, and they seem to have been able to convince everybody about it. It is provided for in legislation that services are divided in order to create competition but there is still a responsibility to provide that service. If that does not happen, or does not occur in the way it was intended to be operated to ensure the customer has continuity and security in service, which is competitive and satisfactory, the service would not start to begin with. We must come to grips with that issue, particularly with regard to State and semi-State bodies proposed for privatisation.

I am not a prisoner of either idea and both have a meaningful role to play. However, companies should operate to the benefit of the consumer. It is nonsense and untrue to say the investor comes first. If an investor is to come first, one should buy a bank or other institution in the money business. When interest rates drop, there is a greater tendency for utility services to be used by the investment sector as if they were banks.

I do not blame them as there is a current example with the oil business. I would love to be a shareholder in that business and have bought shares four, five or six years ago. I would be in the Caribbean now if I had done so, rolling in sunshine, and rightly so because I would have made a huge fortune. Every day oil prices are being talked up. A similar concept for utility services — also an energy business — is something we must watch for very carefully. We must consider that in whatever structure the Minister eventually arrives at with this legislation.

If what I outlined does happen — I know it will not — I will kick up a terrible row if I am still alive at the end of it. Consumers' interests and requirements must be met first, last and always. Those wishing to invest are welcome and we are delighted to assist and encourage such behaviour, which is part and parcel of the process, as long as the customer does not become the victim.

I will refer to a couple of points on wind generation. We have all agreed that such technology in this country must be the means of producing electricity that is most likely to succeed, as there is a never-ending supply of raw material. There is no question that if the wind dies down around our coasts, we could even generate a fair amount of warm air, from time to time, in this House and various other assemblies.

The process must be done sensitively. A far greater proportion of electricity requirements can be met from wind sources, provided we go into locations sensitively. We must utilise modern technology as well. When this type of electricity generation was first mooted, capabilities were less than 25 kV and the concept of a wind farm had not developed. Individual turbines can now produce approximately 5 kV and their output is growing and will continue to do so. We can get accustomed to them.

It is ironic that, as people are worried about cancer being caused by pylons and cables, there may be a similar problem with turbines because of the transmission of electricity and rotation of the blades. They are a source of health concerns for some so the Minister should, to head such concerns off, nail down the best possible independent information. We can discuss such concerns and take them out of the arena.

The future role of EirGrid must be carefully monitored and strong. We must ensure nobody gets a hold of an interconnector east, west, north, south or otherwise which might create a "ransom strip". We have all heard of these from development of lands. Those in possession of such a ransom strip prevent all other development and an interconnector could become the ultimate ransom strip.

The Minister must give long and careful thought to the rest of the ESB structure reappraisal and development. He will need to carefully consider the options and discussions with the unions. People may blame the ESB and unions for various things but it has been a tremendous company that has given tremendous service. It has been reliable and has gone overseas with technology to effectively assist those in need across the water. It is a big operation.

I hope economies of scale, attainable through big companies such as the ESB and others, continue in future. Otherwise the customer will lose.

Deputy Martin Mansergh

I welcome the Bill and the Minister.

Interconnection has a history going back at least 30 years, or as far back as the Cork to Midleton railway line, for example. I used to be an official dealing with energy in the Department of Foreign Affairs in the late 1970s and top of the agenda at the Taoiseach's Department at that time was east-west interconnection. It was politicised to the extent that it was being pushed as a strategic objective. It clearly had important energy policy dimensions and I remember attending talks in the Department of Energy in Millbank, where this was discussed.

The economics at that time never quite came together. As the Minister referred to in his speech, there was also the dimension of the North-South interconnector, which was disrupted and destroyed by IRA bombs. How that was supposed to contribute to the unity of the country is about as puzzling as putting devices on the Dundalk-Newry railway line, which still happens occasionally.

As Deputy Durkan alluded to, there was at that time a little bit of what one may term "insular geopolitics" involved in both electricity and gas sectors. If there was to be any electricity interconnection between Ireland and Britain, Northern officials were anxious to have it go across the North Channel. We were equally determined that it would be an Ireland-Wales interconnector. Most of those considerations have given way to those which relate to what is in the interests of different countries and jurisdictions.

The North-South interconnectors were restored some time ago and there is now a single energy market on the island of Ireland. These are beneficial developments but they only marginally improve the economies of scale. When I worked as an adviser in the Taoiseach's office, I recall discussing with representatives of the ESB the Coolkeeragh plant on the north coast. The capacity of said plant was going to exceed the natural needs of Northern Ireland and the excess was going to feed into the north-west region of the Republic, primarily County Donegal.

I have no doubt about the value and importance of interconnection, particularly when energy supply at an affordable price is at risk. One must try to achieve the economies and that can only be done by sharing with larger markets. I welcome the fact that EirGrid will be the vehicle for doing this and I am glad the latter will remain in public ownership. In general, I believe strategic infrastructure should be in public ownership because the Government or public authorities can then react to situations and are not obliged to persuade, bribe or compel private operators to take actions which, for purely financial reasons, they may not be inclined to take.

The previous speaker referred to the ESB being in public ownership and the question of competition. Many of the European laws that deal with such matters are primarily designed to cater for much larger national and transnational markets. France has a large market and the Government of that country is determined to retain control of EDF. I regard the ESB as one of our most efficient semi-State companies. Since its formation 80 or so years ago, it has done a superb job.

The unions in the ESB are quite powerful. Yesterday, we paid tribute to the outgoing Taoiseach, Deputy Bertie Ahern, whose first achievement as Minister for Labour in May 1987 was to solve a serious dispute in the ESB. When people seek competition and when private companies press governments for a slice of the market, what they are really seeking is a slice of the monopoly. It is felt that there can be perverse situations in which one is obliged to raise the price of electricity in order to attract competitors into the market so that, in the long-term, it is hoped, the price will fall below a level than would otherwise the case. I am sceptical about this line of thought.

I previously held a negative view of a certain trade union official — I will not name him because he is outside the House — who seemed at one point to want to "Scargillise" the railways. However, I find myself somewhat more in agreement with his views on the ESB. If there is to be a monopoly — it may be difficult to avoid it in light of the relatively small size of the market — a near monopoly or a duopoly, the ESB is a fine company in that regard and falls under a fair degree of Government control. When working as a civil servant in the late 1970s, I observed that it sometimes seemed that the ESB was rather more in control than either the Government of the day or those civil servants who were nominally in charge. That was at a time when the Government was being pressed very hard on the nuclear project.

The legislation and the concept of interconnection make a great deal of sense. Arguably, they are both vital in the context of expanding the market for renewables. A great deal of renewable energy is of a fluctuating nature. Wind energy is an obvious example. In a small market, it is not possible to become dependent on wind energy for more than a certain percentage of one's needs because one will otherwise put one's supply at risk. However, fully operational interconnection with a very large market completely alters the context. The establishment of interconnection is necessary if one is to make serious progress with wind generation.

The Minister is probably more conscious than anyone else that the term "green" — I do not use it in its strictly political sense — is much abused. There are often competing points of view that each claims to be greener than each other. Partly as a result of my experience of local controversies in County Tipperary, I would not be completely enamoured of land-based wind generation. Pushed beyond a certain point, the latter would conflict with tourism and amenity objectives. There are some locations to which land-based wind generation is particularly suited. Equally, however, there are others to which it is not appropriate. I appeal to the Minister not to adopt an attitude that wind energy in unlimited amounts is good, regardless of where the turbines etc. relating to it are located. Serious environmental conflicts or disputes could arise if we were to push too hard in respect of this matter.

I have very few reservations with regard to offshore wind generation. Most of the time one cannot see the wind turbines on the Arklow banks. If one can see them at all, they appear almost as matchsticks on the horizon. The turbines on the Arklow banks do not interfere with amenities in any serious way. The volume of wind at sea is probably much more constant than it is on land.

As the Minister is probably aware, Scotland, which is similar to Ireland, has serious restrictions on where it will allow large-scale wind generation projects to be located. In the past week, the public authority on one of the Outer Hebrides rejected plans for a very large wind energy project on the grounds that it would interfere with the amenities and tourism attractions of the island. Another aspect of interconnection — I am referring here to interconnection with Britain — is that it means we will be importing nuclear energy among other things. The Minister probably chose not to refer to this matter or if he did refer to it, he did so only briefly. I do not have a particular problem with that and do not regard nuclear as a moral issue, although practical and safety issues arise. Broadly speaking, I agree with the Minister's views on nuclear energy. We have a small market for the standard economic nuclear power station. I remember the Taoiseach being very puzzled when a number of pro-nuclear experts were putting their case as if to ask in which constituency they were proposing to locate such a facility. Notwithstanding the arguments that have been made, it would be very difficult at this point to find any constituency in Ireland that would accept a nuclear power station.

There are also reservations about the economics of nuclear power. It is no accident that some of the major civil nuclear powers also run military nuclear installations so some economies of scale may have been achieved that are invisible to the public eye, not least in technological research. The British Government has had to stump up tens of billions to decommission nuclear waste. British taxpayers must be very forbearing because they do not seem to bat an eyelid at the cost of the nuclear industry.

Notwithstanding the fact that a generation after Carnsore Point some nuclear advocates want to re-examine the question — I have no objection to the matter being debated — for political and economic reasons and the question of consent, the arguments do not really add up. While I may be arguing against myself, if one has interconnection, in theory the relatively small size of the island market here would no longer necessarily be an objection, but the other considerations also kick in. In addition, I would be fearful of a terrorist attack. The attacks on the Twin Towers in New York literally came out of the blue one morning. One never knows what might be attempted next, despite all the precautions. Eventually, over time, when nothing happens, people lower their guard and there is more opportunity to strike again.

Even 12 months ago we were keen to promote bio-fuels and the European Union also has a programme for promoting them. They were getting a favourable wind but now we are reading headlines about world food shortages so a certain degree of caution is required. If one looks at the matter purely in an Irish context, there is no doubt that there has been a trend towards the extensification of agriculture, although we are certainly nowhere near producing our maximum. People keep referring to us as a small island whereas we are the third largest island in Europe. The Romans got that one right but we tend to get it wrong. We may be an island with a relatively small population but we are not a small island. In other words, we have land which can be used for bio-fuels and forestry without materially affecting or prejudicing mainstream agricultural production, the WTO and Commissioner Mandelson willing.

If one drinks too much water one will drown so all good things are good in moderation but not to excess. The problem is that one gets enthusiasms for alternative energy, such as bio-fuels, and while there is much scope in these areas nothing should be done to excess or uncritically.

I do not know whether the Minister mentioned the figure in his speech, but as I understand it we are approximately 90% dependent on energy imports at the moment. I can remember at the time of the second oil crisis the figure used for Ireland was 80% and the aim was to bring that down. One matter of concern, which is rarely discussed in this House because of its sensitivity, is the delay in bringing natural gas ashore on the Mayo coast. While the matter was perhaps approached clumsily at first, there have been many attempts to accommodate reasonable demands. It is not right that a protest group should be holding things up on national policy grounds. The House and the Government are elected to deal with energy policy issues and to make democratic decisions about them, including the terms of oil and gas exploration. That is a matter that should be left to this House. With the alteration of the pipeline, I hope that the larger interests of the country might be taken into account and the protest will draw to a close. It has been prolonged and has cost the Garda Síochána a great deal of money and resources, which could have been better used elsewhere.

Deputy Seymour Crawford

I welcome the opportunity to speak on this Bill. I asked many times on the Order of Business that this Bill or the other legislation concerning EirGrid be brought before the House to give us an opportunity to speak on the overall situation and interconnection in particular. I hope the Minister will not mind me speaking on cross-Border grid structures, as Deputies Johnny Brady and Thomas Byrne have done. Such structures can be called an interconnector or part of an all-Ireland grid. I welcome the statements by both aforementioned Deputies because some of the comments that were being made at meetings earlier in the year certainly differed from them. I congratulate the north-east pressure group on the message it got across to people there. I refer to the press release from North East Pylon Pressure, regarding the position in Meath, Cavan and Monaghan, headed "EirGrid ‘compensation' offers €1 billion to the cost of the pylon lines":

According to a report in a local newspaper this weekend, EirGrid has admitted to Meath GAA that it would be willing to pay financial compensation to home and landowners in counties Meath, Cavan and Monaghan whose properties would be devalued as a direct result of siting overhead power lines near them. Meath GAA Chairman, Cathal Seoighe, said EirGrid had indicated they were willing to set up a consultation and arbitration process to compensate home and land owners who could prove their properties had been devalued by pylons. Colin Andrew, a spokesman for the North East Pylon Pressure campaign (NEPP) said: "EirGrid have now conceded the dramatic effects pylons have in devaluing property. Our estimates confirm that — using averaged results from international studies, allowing for the housing density along the proposed route corridors, as well as average land prices — the overall cost of compensation will add between €800 and €1,000 million to the capital cost already admitted by EirGrid."

"On this basis", Colin Andrew said, "NEPP's proposal to underground the cables is now seen clearly to be a far cheaper option than overground pylons. Underground has the additional cost saving of cheaper maintenance and increased reliability and it helps the environment by reducing carbon dioxide emissions."

NEPP notes EirGrid's undertaking that they would not erect pylons on GAA land or within 250 metres of GAA property. We see that as an important admission by them of the health dangers posed. We now call on them to take one more step. They must undertake not to erect these massive pylons on any land in the North East.

NEPP calls on the Minister for Energy, Eamon Ryan, to see the absolute folly of attempting to go against the wishes of the three County Councils affected, the GAA, Toilte Ireland, Meath IAVI, ICA and the ICMSA, and over 45,000 people potentially affected by this proposal. The Minister must direct EirGrid to do the right thing — which now looks increasingly economically preferable — and underground the cables.

It is important to read this into the record because it is not a press release from a way-off group but from a group that has put much work into what they are talking about. I have met them, as have Deputies Brady and Byrne, at meetings where hundreds and sometimes thousands of people were present. Everything must be done to ensure the group's anxieties are taken into account. I welcome Deputy Conlon to the Chamber because she is in the middle of the situation and the cables will go through her home area. People in the area take this extremely seriously and are extremely anxious about it.

This is part of an all-Ireland grid, and is not just a connector. It will be used for wind farms to link in and power to be taken off. It is not like the interconnector from here to Wales. There is much anxiety and much work to be done by EirGrid and the Minister to address the situation and identify the best way forward. I have spoken of the need for links with Northern Ireland and across the Irish Sea.

Last year, a well-known manufacturing company, Wellman of Mullagh, which has plants in Holland and France wrote to us and provided a graph with a breakdown of cost factors showing the cost of electricity in Mullagh to be almost twice what it paid for a similar plant in France. Anyway we can minimise the cost of power to industry and farmers must be done, but in a way that is acceptable to everyone in the interests of health.

Deputy Brady referred to the visual issue and the problem with tourism. These must be taken into account as well. We must do that. I record the Minister's willingness to debate this issue. The Minister attended the committee, of which I am not a member but which I was allowed to attend, and listened to the concerns of members. As the Minister stated in a letter later, as a result of the debate a decision was taken to undertake an independent study.

I am worried about the independence of the study when the information is from people who worked with EirGrid before. It is difficult to see how they can be totally independent. It is equally difficult to see how to get an accurate assessment done within 40 days. I thank the Minister for taking this into account.

We are in a time where people do not take things for granted as they did many years ago. This is an era when people can contact others and get a group together quickly by text or other means. If there is a power line from Clare to Dublin that is causing a problem, people have access to all kinds of information. The folk in this pressure group are doing an incisive job on getting information.

I have a close friend who, along with his two brothers, built a house recently and will be directly affected by the line. They take this very seriously. They are business people and want to see matters moving on. They are not negative or raising this issue for the sake of being awkward. I have been involved in some groups that are there for the sake of being awkward but that is not the case with this group.

The Minister was present in the committee when colleagues showed the proposed layout for the future of the country. It is at least ten times the distance of lines proposed to be extended after this. If this is causing problems in our area, there is no doubt there will be problems in other areas. If this can be resolved in an amicable way, the potential is there for further layout of the proposed cables to bring this country forward economically and with proper power.

The withdrawal of the other EirGrid Bill puzzles me. It was promised but is being withdrawn. I worry about the handover of issues to other bodies. We have seen what happened with Eircom. While there are all types of competitors for one's telephone bill, the reality is that we depend on Eircom for the telephone lines, in the main, especially in rural Ireland. If one is trying to get broadband through Eircom in Martin Lodge or some other places in County Monaghan or County Cavan, one will find it extremely difficult. A friend of mine, Mr. Nugent, has some 25 people working for him and they need broadband. An Eircom representative arrived, did not know what was wanted and when told by one of the staff, said nothing could be done. We do not want a situation such as that with the ESB and we would need to ensure we retain control so that we can get electricity lines whenever and wherever we want them.

I want to address a couple of other issues in the time I have left. As a member of the British-Irish Interparliamentary Body, I am aware that one of the things being looked at by a sub-committee is the whole green energy situation. We have visited Scotland in this regard. Deputy Mansergh mentioned a short time ago what had happened on some of the islands in Scotland. We have seen how they have moved forward as far as green energy is concerned, and certainly we have a good deal to learn from them. They are dealing with wind offshore, biomass etc. On visiting their biomass plant one sees them using poultry litter. Not only are the farmers paid for the poultry litter, but they are also getting cheaper electricity. That puts our problems in context as far as competition is concerned. We certainly cannot compete with that.

Meat and bone meal has been utilised, also, in the UK to make electricity. Yet we have exported it to Germany, one of the cleanest countries in the world, effectively giving them raw material for virtually nothing. Our study has yet to be fully completed, but it will be encouraging the use of green energy as far as possible. There is a massive windfarm in my constituency outside Cootehill in County Cavan. It took years to get agreement on the interconnector there. The people who wanted to go ahead with the first windfarm there had to go to Scotland for years, while awaiting Government approval to get that done. If we are serious about moving the green energy forward and ensuring we have as much energy as possible here from the cheapest sources, then we must ensure the barriers are removed and that the people who want to are given the opportunity. I believe there are 36 wind farmers in one group there and 19 in another. There are also wind farms around Ballyconnell and some smaller units just outside Ballybay, near my home area. It might be something the Minister could look at, but I understand that some of the cabling for the latter windfarm is actually underground, for whatever reason. That might give him some idea of the cost factor and how, in a Monaghan situation, the costs underground compare with those over ground. I do not have the figures, on hand, but it is very important that the Minister does this.

Another issue that will be problematic and, indeed, has already caused serious problems in our Border area constituency, is how pig units deal with their waste. I would urge the Minister, along with the Minister for Agriculture, Fisheries and Food to re-examine that whole situation to determine how the energy generated may be utilised and how we can retain production there. I realise some of the smaller units that have been forced out of business in the last few years would not be in a position to deal with that situation, and obviously the slurry product cannot be transferred too far. However, it is a substance that should be used instead of bought-in fertiliser. If it cannot be used in that way, then it should be utilised for the production of electricity.

The Minister said, in his speech, that the purpose of the Bill was to provide EirGrid with the legislative underpinning to advance to the next stage of the east-west interconnector project. That is to go ahead in September 2011 and the targeted date for completion of works is the end of March 2012. This is very important, as I have said earlier and brings us to another subject, which the Minister has raised, namely, the whole issue of nuclear power. The last speaker, Deputy Mansergh, mentioned this as well. Nuclear power is something we all talk about and say we should not have, and all the rest of it. However, when we have to compete with others who have it, we must see how we can benefit from it, in the event. It is very much allied to how others produce food and get away with using hormones for the same markets as us, but we do not. I believe we can get around this issue without too many scruples by having proper interconnection with the UK and perhaps, further on, into Europe. Wellman is an example of the argument that we will continue to lose competitiveness, especially in manufacturing industry, if we do not and cannot produce the basics of power, water and all other energy inputs at a similar cost to our competitors. I welcome the prospect of the interconnector being put in place and urge the Minister to ensure everything is done to facilitate this. In doing that it will leave us not just open to competition but open to opportunity with wind, especially. Someone said earlier that there could be wind in one place but not another. However, if we are connected to a much larger Continent, we will be sure of guaranteed power, and we must be absolutely sure of that. Gas and other issues are finite problems. At the present time we are dependent on gas from the North Sea and Russia. Russia might fall out with some countries, with extreme consequences not just for Ireland, but Europe. In that context this interconnector is of extreme importance.

I wish the Minister well with this Bill and hope the matter can be sorted. Before I finish I urge the Minister to ensure that a proper study is done into underground and over-ground costs for the north east. I assure him I will work with him, as a public representative, to try to deal with the situation in a constructive proactive manner so that whatever the study shows will be positively dealt with.

Debate adjourned.

Dáil Éireann debate - Thursday, 24 Apr 2008

Electricity Regulation (Amendment) (EirGrid) Bill 2008: Second Stage.

Dáil Éireann debate -
Thursday, 24 Apr 2008